OKO, an insurance technology startup focused on securing farmers’ income across Africa, has closed a seed investment of $1.2 million led by Newfund and ResiliAnce.
Mercy Corps Venture, Techstars, ImpactAssets and RaSa also participated in the round, OKO said on Thursday.
The startup operates in Mali and Uganda. It uses satellite data and mobile payments to create automated insurance products for farmers whose fields are affected adversely by weather events — primarily droughts and floods.
With the new funding, OKO aims to strengthen its presence in Mali and Uganda and expand its offerings to more African markets, starting with Ivory Coast.
“We believe recent advancement in Internet of Things and data availability will lead to the rise of parametric insurance in Africa for the benefit of the local populations,” said Augustin Sayer, partner at Newfund, which makes pre-seed and seed-stage investments.
OKO founder and CEO Simon Schwall said agriculture is by far the largest source of occupation in Africa, with an estimated 33 million farms, and yet farmers are deprived of basic financial services like insurance and loans.
“We are using technology to solve this issue and secure the income of those farmers,” he added.
Schwall started the company along with Shehzad Lokhandwalla, who is the CTO at OKO.
The company graduated from the Techstars programme in 2018. It has about 7,000 paying customers in Mali and compensated more than 1,000 farmers who were affected by floods last year.
OKO’s customers typically grow maize, cotton, sesame or millet. It also works with agro-industries to help them with their sustainability goals and secure their relationships with suppliers. It has completed successful pilots with ABInBev and Touton in Uganda.
Farmers only need to connect to OKO via a phone (not necessarily a smartphone) dialling a short code to obtain more information and pay through mobile money services. For this, the company partners with mobile operators.
Another African insurtech startup that got funding recently is Pula. Nairobi-based Pula raised $6 million in Series A funding to expand its operations in its existing 13 markets across Africa and also expand into Asia. Pula snagged the funding from TLcom Capital and Women’s World Banking.
Pula was launched in 2015 by Rose Goslinga and Thomas Njeru. It designs and delivers agricultural insurance and digital products to help smallholder farmers endure climate risks, improve farming practices and bolster incomes.
Last month, Curacel, an artificial intelligence-powered platform for insurance claims processing and fraud management in Africa, raised $450,000 in pre-seed funding led by Atlantica Ventures and Consonance Investment. Kepple Ventures and some African angel investors also participated.